Work vehicle

stewart-page

Hi there, I am a self employed support worker (sole trader) and I use a vehicle solely for work purpose. We use my wife's car when I'm not at work. 

My work car has failed its MOT badly and isn't cost effective to repair. I wondered if I was to get a new car on finance how much I could claim back? 

I haven't got a car in mind yet but for example probably something like a £15k car. (I would likely need to pay monthly for it too, hopefully around £250 a month) 

Would I be able to claim the full cost of the vehicle as well as future business miles? Or would it be the monthly cost of the vehicle I could claim? 

I understand that you can't claim both miles and upkeep/repairs. 

Many thanks 😊

Dazed_and_C0nfused

stewart-page said:

Hi there, I am a self employed support worker (sole trader) and I use a vehicle solely for work purpose. We use my wife's car when I'm not at work. 

My work car has failed its MOT badly and isn't cost effective to repair. I wondered if I was to get a new car on finance how much I could claim back? 

I haven't got a car in mind yet but for example probably something like a £15k car. (I would likely need to pay monthly for it too, hopefully around £250 a month) 

Would I be able to claim the full cost of the vehicle as well as future business miles? Or would it be the monthly cost of the vehicle I could claim? 

I understand that you can't claim both miles and upkeep/repairs. 

Many thanks 😊

Someone more knowledgeable on self employed expenses will no doubt comment in due course.

But assuming you are referring to HMRC you can never claim the full cost back from them.

You will get tax relief on whatever you eligible to claim for.  The amount of relief will depend on your taxable income but is typically 20% or 40% of the claim (or a mix of tye two).  Can be more, can be less.

dinosaur66

stewart-page said:

Hi there, I am a self employed support worker (sole trader) and I use a vehicle solely for work purpose. We use my wife's car when I'm not at work. 

My work car has failed its MOT badly and isn't cost effective to repair. I wondered if I was to get a new car on finance how much I could claim back? 

I haven't got a car in mind yet but for example probably something like a £15k car. (I would likely need to pay monthly for it too, hopefully around £250 a month) 

Would I be able to claim the full cost of the vehicle as well as future business miles? Or would it be the monthly cost of the vehicle I could claim? 

I understand that you can't claim both miles and upkeep/repairs. 

Many thanks 😊

self employed for decades but  only ever bought vans for work and for claiming on my tax return so not knowlwdgable at all on cars

if i had your job i would not be spending 15k on this car personally i would look for a car that has done 30k and costs £4k 

 unless you are in a hilly area and need a bit more power but again i know nothing about finance when it comes to buying vehicles always bought them outright.

you can claim capital allowance for buying the car for your work

and AIA of 6% depreciation a year on a car you can claim

you know how many miles you do 10k miles a year is 4.5k which beats costs

i do not know if you have to pay hmrc tax on it if you sell it again / with a van you do / a car i do not know.

i would guess its the monthly cost of the payment you can claim but its a best guess only 

Nearlyold

What basis are you currently using for your accounts/Tax return. Traditional or Cash Basis? (I'm guessing cash) what is your anticipated business mileage?  We used cheapish used van based MPV's for our dog walking business and always used simplified expenses ie 45p a mile as that worked out better & less bother than claiming fuel, maintenence and depreciation. 

SkylineExplorer

Having been in a similar spot, I’d suggest checking the tax rules closely. If the car is purely for work, you might be able to claim capital allowances on the purchase cost instead of the monthly payments.

As you said, it’s usually a choice between mileage or running costs. It’s worth getting advice from an accountant to ensure you make the most of your claim.

Best of luck

Jeremy535897

You can either choose to claim mileage or the actual cost of the car. For a car used 100% for business, actual costs may be a better bet. These include capital allowances on the car, finance costs, fuel, repairs, insurance, recovery and licence.
If your profits exceed your personal allowances by a substantial margin, so you could use the deduction for the cost of the vehicle in full in 2024/25, you would be best looking at an EV, or a twin cab pickup, or a small van, since you do all private mileage in your wife's car.

Grumpy_chap

Jeremy535897 said:

For a car used 100% for business

Plausibly demonstrating that a car has been used for 100% business can be challenging.